Building Plans for Royal Olympic

Details

December 05, 1996

Royal Olympic Cruises expects to select a ship yard for its newbuilding plans for two 920-passenger vessels by the end of January, according to Royal Olympic board member Alex Keusseoglou, with facilities in Greece, Germany and Spain on the line's short list.

Royal Olympic also approached two U.S. shipyards - NASSCO in San Diego, Calif., and Newport News in Newport News, Va., but Newport News could not start construction until 1999 and NASSCO has not yet responded with a proposal.

Royal Olympic, which was formed last year through the merger of Sun Line Cruises and Epirotiki Lines, wants the first ship delivered by 1999 when Greek cabotage laws are lifted. At that point, non-Greek ships will have freer access to Greek waters and thus Royal Olympic - with its aging fleet -­ will face greater competition.

However, Royal Olympic has received very little assistance from the state and has openly criticized the goverment's lack of financial support. This is why the line has sought bids from non-Greek yards in nations which can provide attractive construction packages.

Existing Hull

With construction time slowly dwindling toward Royal Olympic's 1999 deadline, an interesting scenario might be the assumption by Royal Olympic of the half­ finished Regent Sky hull, which is owned jointly by the National Bank of Greece and the Hellenic Industrial Development Bank. The banks claim they have invested $140 million in the 1,500-passenger ship, which was intended for the bankrupt Regency Cruises. Keusseoglou noted, however, that the Regent Sky is too big for his line's purposes and also comes loaded with debt. "We don't want to go any bigger than 920 passengers - we arrived at 920 with the understanding that one must achieve some economies of scale. However, if the banks were to give the hull to us, then we'd be glad to accept it."

At the same time, Royal Olympic has indicated its intention to reflag its Greek-flagged fleet. "We see with real frustration that every other European country has passed laws to expand their internal cruise shipping industry. But in Greece, laws are going through that will eventually kill the cruise business," said Keusseoglou. "The Greek government doesn't understand the contributions made by Royal Olympic to Greece and if they continue (restrictive actions), then Royal Olympic will flag outside of Greece in order to keep ourselves competitive."